Beijing bail-out saved the day for Chinese solar developer

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When the Covid-19-delayed audited version of the 2019 figures for solar project developer and building-integrated PV manufacturer Singyes Solar are eventually published, they are likely to confirm the state bail-out secured in November saved the day.

Singyes – which has renamed itself China Shuifa Singyes Energy Holdings Ltd, and SFSY Energy on the Hong Kong Stock Exchange ticker – received HK$1.55 billion (US$200 million) from the Water Development (HK) Holdings Co Ltd arm of Beijing-owned construction conglomerate Shuifa Group, enabling it to reorganize a slew of defaulted senior notes and convertible bonds.

Those defaults had caused problems for the Guangdong-based solar business, with the unaudited annual figures reported at the end of last month stating a “majority of the group’s solar EPC [engineering, procurement and construction] projects cannot be delivered in accordance with the original schedule”, due to liquidity constraints.

Borrowings

The takeover by Water Development changed all that, although the company did post a total comprehensive loss of RMB1.05 billion (US$148 million) last year, up from RMB792 million a year earlier. The reorganization of a considerable debt pile saw current borrowings fall from RMB2.96 billion to RMB1.25 billion, year-on-year, but the non-current figure rose from zero to RMB1.66 billion. The admission the company’s borrowings in mainland China carry interest rates ranging from 4.78-24% is also likely to raise concerns among the remaining independent investors.

A tough year for the business appears to have had a devastating effect on the workforce as well, with employee expenses of RMB222 million in 2018 tumbling to 174 million last year. Singyes said the change was down to a “drop in [the] number of employees, the average salary and bonus.”

The company has extended the date by which it will publish the audited figures to May 15, citing disruption caused by measures imposed in Zhuhai to limit the spread of Covid-19.